November 23, 2010

Federal Judge Hits Iran with $44M Judgment in Civil Suit

Adding to an ever-growing list of rulings in a case that has spanned almost 30 years, a federal judge in Washington today entered a nearly $44 million judgment against Iran in litigation that McKesson Corp. brought over its financial interest in an Iranian dairy.

Following the Iranian revolution in 1979, McKesson sued Iran in Washington’s federal trial court over allegations Iran illegally withheld dividends the dairy issued and that Iran expropriated the company’s 31 percent interest in the dairy. The suit has dragged on for 28 years over liability issues. The background’s here.

Today, Judge Richard Leon of the U.S. District Court for the District of Columbia shot down what he called Iran’s attempt to “resuscitate” previously rejected arguments that lawyers for the country—represented by Berliner, Corcoran & Rowe—have made over the years. Leon reinstated an earlier judgment for McKesson and included compound interest.

“Iran’s attempt to relitigate issues, such as its “come to the company” defense that diverted this litigation for a number of years, is simply incredible,” Leon wrote. Earlier, lawyers for Iran had argued that shareholders must “come to the company” to collect dividends. Leon ruled McKesson has causes of action under Iranian law and customary international law.

A lawyer for McKesson, Morgan, Lewis & Bockius partner Mark Bravin in Washington, was not immediately reached for comment this afternoon.

Thomas Corcoran Jr., an attorney representing Iran, said an appeal is likely. The case has reached the U.S. Court of Appeals for the D.C. Circuit five times already, Leon noted in his ruling today.